Los Angeles alternative asset management firm Ares Management LP (NYSE: ARES) aims to diversify services by adding Kayne Anderson Capital Advisors LP in a $2.5 billion deal.

Kayne, founded in 1984 and also based in Los Angeles, has about 110 employees across eight U.S. offices holding $26 billion under management. The target focuses on energy infrastructure, real estate, middle market credit and growth private equity. The combined company will be called Ares Kayne Management LP and will have nearly $113 billion under management.

Kayne will be Ares’ first major merger after it went public in 2014. One of the reasons Ares went public is so it can pursue acquisitions, company officials previously indicated. Kayne will add to Ares’ energy-related services, which include the acquisition of Energy Investors Funds earlier in 2015.

Ares has been demonstrating ambitions to expand. It was one of many financial services firms to bid on GE Capital’s Sponsor Finance group, including the sought after Antares Capital unit. The group went on to be sold to the Canada Pension Plan Investment Board, in a deal announced in June. Ares and Kayne began merger talks that same month.

Moelis & Co., Bank of America Merrill Lynch and Proskauer Rose LLP advised Ares. J.P. Morgan Securities LLC and Paul Hastings LLP advised Kayne.

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